Searching for Savings

By Mike Romor

February 15th, 2018

Facing the dueling pressures of delivering a high-quality, high-tech campus experience while reducing costs, U.S. higher education leaders in 2018 will look to campus facilities as a source of added value and savings, say experts from JLL, a Chicago-based professional services firm specializing in real estate. From using energy and space more efficiently to tackling deferred maintenance and outsourcing facilities management, colleges and universities are taking a fresh look at their facilities.

“With tech-enabled classrooms and connected living and gathering spaces, campuses are evolving to provide today’s students with the wired experience they expect,” says David Houck, co-leader of JLL's Higher Education practice. “It has been widely publicized that higher education institutions are also experiencing significant financial pressures. As a result, some are rethinking how they plan, deliver, manage, and maintain their facilities because facilities are second only to personnel in campus expenditures.”

Declining revenues from tuition and public support, coupled with aging facilities and rising pension liabilities, mean many colleges and universities are looking to the private sector for ideas.

“We’re seeing more chief business officers being hired from the private sector rather than academia,” says Houck. “These executives are opening the door to fresh thinking about outsourcing strategies and looking at facility management and public-private partnerships as a means of filling funding gaps.”

Five Campus Facilities Trends to Watch in 2018

Houck and Higher Education Practice Co-Leader Kevin Wayer predict five trends that will shape real estate and facilities in higher education in 2018:

1. Smarter space utilization will rule the day. As teaching delivery models have evolved, so have the spaces needed for learning. A traditional lecture hall, for example, may sit empty while professors hold court in smaller classrooms that facilitate collaborative and interactive learning. No wonder many public and private universities are using space utilization studies. Why build new facilities when you could use existing space more effectively?

“Brand new facilities can help ‘sell’ a campus to students, and some donors like the opportunity to leave a lasting legacy on campus,” says Wayer. “However, stretched resources and the drive for cost efficiency mean institutions have a greater appetite for repurposing under-utilized spaces.”

2. Outsourced facility management will become increasingly top-of-mind. In the hunt for savings, college and university business officers are looking closely at how their facilities are managed. More institutions are exploring how out-tasking and outsourcing facilities management can unlock savings while creating a more vibrant campus community. They’re also taking a close look at energy efficiency as a means of reducing costs while delivering on sustainability goals important to trustees, professors, and students.

3. Technology will be leveraged for new real estate efficiencies. One way to uncover potential savings in campus facilities is to analyze how buildings are used and how efficiently building equipment is operating. Using data and insights tools created specifically for facilities, higher education institutions can identify opportunities to reduce energy waste, expedite work orders, extend equipment life or even gain the advantage in lease negotiations.

“Universities have a ton of data, but it’s not typically aggregated in a way that allows them to assess opportunities for savings,” says Wayer. “Today’s data and insights tools can translate the data generated from university real estate operations into actionable insights that more than pay for the technology investment.”

4. Higher education facility managers will prepare for the campus of the future. The tech-enabled campus of the future can only become a reality if universities have skilled people to manage smart building technologies and analyze the treasure trove of data coming from sensors and other connected devices. To close the skills gap, universities are investing in education for their facility management teams. More campus facility managers are attending educational seminars and conferences organized by the International Facility Management Association (IFMA) and APPA, as well as in-house training. The end goal? A facility management team that’s comfortable using the latest building technologies to drive efficiencies on campus.

5. Institutions will seek alternative ways to finance a broader range of new construction and renovation projects. Interest in public private partnerships (P3s) is growing as both public and private higher education institutions look to fund new developments without tapping public debt. Traditionally used for student housing projects, P3s are becoming more widely adopted for other types of developments.

“Schools have seen the broad success of student housing projects established through P3s,” says Houck. “Now they are looking at how this funding and operating structure can be used to realize other campus and off-campus projects, from academic facilities to mixed-use commercial projects and parking garages.

“Students, faculty and administrators alike want their campuses to be sustainable, tech-friendly, vibrant communities. As we look ahead to 2018, one thing is certain: colleges and universities are searching for creative solutions and partnerships to help realize their goals for the student experience and campus transformation.”

About the Author

Mike Romor works in public relations for JLL (www.us.jll.com/united-states/en-us), is a professional services firm that specializes in real estate and investment management.